GrowGeneration Corp.GRWG
GrowGeneration Corp. Goodwill & Intangibles Disclosure
6. GOODWILL AND INTANGIBLE ASSETS
The Company performs goodwill impairment testing annually on December 1, or more frequently if events or circumstances were to occur that would more likely than not reduce the fair value of reporting units below the carrying amount. The Company would recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill. The adjusted carrying amount of goodwill shall be its new accounting basis.
For the goodwill impairment test performed on December 1, 2025, only two of the Company's four reporting units had remaining goodwill balances. The Company elected to qualitatively review both reporting units for events and circumstances which would indicate whether it was more than likely than not reporting unit fair values were below carrying values. The qualitative assessment did not identify any indicators of impairment, and accordingly, no further impairment assessments were necessary.
For the goodwill impairment test performed on December 1, 2024, the Company elected different approaches based on the circumstances surrounding each reporting unit. Of the Company's four reporting units, only three had remaining goodwill balances. The Company elected to qualitatively review one reporting unit for events and circumstances which would indicate whether it was more than likely than not reporting unit fair values were below carrying values. The qualitative assessment did not identify any indicators of impairment, and accordingly, no further impairment assessments were necessary. For the remaining two reporting units, the Company elected to bypass the qualitative assessment and proceed directly to a quantitative assessment. The fair value of each reporting unit was primarily determined using the income approach, which discounts estimated future cash flows to present value using an appropriate rate of return. Multiples of earnings based on the average of historical, published multiples of earnings of comparable entities with similar operations and economic characteristics are also used in developing estimated fair values. The estimated fair value of each reporting
unit was compared to each respective carrying amount, and, as a result of changes to the business and future projections, the Company recorded a goodwill impairment loss of $5.9 million for the year ended December 31, 2024.
In conjunction with the quantitative impairment assessment on December 1, 2024, the Company performed a recoverability test on the following finite-lived intangible assets: customer relationships and trade names. The Company determined the fair value of these finite-lived intangible assets using the income approach. The estimated fair values of the finite-lived intangible assets were compared to the respective carrying values, and as a result, the Company identified a $0.7 million impairment loss, for the year ended December 31, 2024.
For the goodwill impairment test performed on December 1, 2023, the Company completed a quantitative goodwill impairment assessment for each of its four reporting units. The fair value of each reporting unit was determined using the income approach, which discounts estimated future cash flows to present value using an appropriate rate of return. The estimated fair value of each reporting unit was compared to its carrying amount, and, as a result of changes to the business and future projections, the Company identified a $9.3 million impairment loss related to its goodwill for the year ended December 31, 2023.
In conjunction with its annual goodwill impairment assessment on December 1, 2023, the Company quantitatively evaluated the recoverability of its long-lived assets, including its finite-lived intangible assets, for impairment. The recoverability assessment compared the carrying value of long-lived asset groups to their expected future pretax cash flows (undiscounted and without interest charges). If the undiscounted cash flows were less than the carrying values, an impairment loss was recognized for the difference between the estimated fair values using an income approach and the related carrying values. As a result, the Company identified a $6.2 million for the year ended December 31, 2023 related to its finite-lived intangible assets, including trade names, patents, customer relationships, non-competes, and intellectual property.
The changes in goodwill, including the impairments discussed above, by segment for the years ended December 31, 2025 and 2024 were as follows:
| Cultivation and Gardening | Storage Solutions | Total | |||||||||||||||
| Balance as of December 31, 2023 | $ | 5,920 | $ | 1,605 | $ | 7,525 | |||||||||||
| Impairment | (5,920) | — | (5,920) | ||||||||||||||
| Balance as of December 31, 2024 | — | 1,605 | 1,605 | ||||||||||||||
| Acquisitions and measurement period adjustments | 475 | — | 475 | ||||||||||||||
| Balance as of December 31, 2025 | $ | 475 | $ | 1,605 | $ | 2,080 | |||||||||||
Accumulated impairment for goodwill related entirely to the Cultivation and Gardening segment and totaled $131.9 million, $131.9 million and $125.9 million as of December 31, 2025, 2024, and 2023, respectively.
The changes in intangible assets, including the impairments discussed above, by segment for the years ended December 31, 2025 and 2024 were as follows:
| Cultivation and Gardening | Storage Solutions | Total | |||||||||||||||
| Balance as of December 31, 2023 | $ | 13,501 | $ | 2,679 | $ | 16,180 | |||||||||||
| Amortization | (5,885) | (781) | (6,666) | ||||||||||||||
| Impairment | (735) | — | (735) | ||||||||||||||
| Balance as of December 31, 2024 | 6,881 | 1,898 | 8,779 | ||||||||||||||
| Amortization | (5,221) | (702) | (5,923) | ||||||||||||||
| Acquisitions | 470 | — | 470 | ||||||||||||||
| Balance as of December 31, 2025 | $ | 2,130 | $ | 1,196 | $ | 3,326 | |||||||||||
On June 6, 2025, the Company purchased substantially all of the assets of Hydro Generation Inc. (referred to as "Viagrow"), a domestic supplier of gardening and hydroponic equipment. The acquisition related assets in the preceding tables represent the estimated fair values of goodwill and identified intangible assets. As of December 31, 2025, the Company has finalized its purchase price allocation. Refer to Note 13, Acquisitions, for additional information regarding the Viagrow acquisition.
Intangible assets on the Company's Consolidated Balance Sheets consisted of the following:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
| Trade names | $ | 27,790 | $ | (26,764) | $ | 1,026 | $ | 27,790 | $ | (21,908) | $ | 5,882 | |||||||||||||||||||||||
| Customer relationships | 13,339 | (11,040) | 2,299 | 12,869 | (9,974) | 2,895 | |||||||||||||||||||||||||||||
| Non-competes | 860 | (859) | 1 | 860 | (858) | 2 | |||||||||||||||||||||||||||||
| Intellectual property | 1,136 | (1,136) | — | 1,136 | (1,136) | — | |||||||||||||||||||||||||||||
| Patents, trademarks | 69 | (69) | — | 69 | (69) | — | |||||||||||||||||||||||||||||
| Total | $ | 43,194 | $ | (39,868) | $ | 3,326 | $ | 42,724 | $ | (33,945) | $ | 8,779 | |||||||||||||||||||||||
Amortization expense for the years ended December 31, 2025, 2024, and 2023 was $5.9 million, $6.7 million and $8.7 million, respectively. Future amortization expense as of December 31, 2025 was as follows:
| 2026 | $ | 2,067 | |||
| 2027 | 817 | ||||
| 2028 | 135 | ||||
| 2029 | 77 | ||||
| 2030 | 52 | ||||
| Thereafter | 178 | ||||
| Total | $ | 3,326 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 20, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 29, 2021 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.